US financial stocks soared yesterday as investors expressed relief that the capital shortfalls identified by the government’s 'stress tests' at large banks such as Citigroup and Bank of America were not as big as some had feared.

Bank shares rose as news of the capital needs of the 19 banks involved in the tests leaked out through the day ahead of today’s release of the results scheduled for 5pm in New York.

Citi, BofA and Morgan Stanley were among the big names that will need to raise equity following the completion of the tests, while JPMorgan, Goldman Sachs and American Express will not need additional capital, people familiar with the situation said.

Financial Times